Business

Uber picks a giant fight with New York's mayor

New York City Mayor Bill de Blasio, left, talks with Rev. Al Sharpton during an announcement of the &quot;Progressive Agenda&quot; along with a coalition of backers, Tuesday, May 12, 2015, on Capitol Hill in Washington.

Uber is taking aim at New York City, and it's starting by attacking the city's mayor, Bill de Blasio.

Uber added a special feature to its app claiming to show New Yorkers what their streets would look like if De Blasio's plans for the city's taxis and ride-sharing arrangements were approved.

In the chilling map, there are no Uber cars — a scary sight for any professional New Yorker.

It's the latest shot in Uber's war on New York's lucrative taxi market. De Blasio backed a proposed bill last month to cap the number of new licenses given to ride-hailing vehicles, a move intended to reduce congestion, but which effectively limits the growth of newer taxi providers.

Uber immediately jumped into its all-too familiar crisis mode.

First an executive suggested Mayor Bill de Blasio and city council members were caving to a taxi industry that was trying to stop Uber. Then the company organized a protest outside City Hall, even offering free rides for participants to get there. Now, with the bill still looming, Uber is reportedly turning to the big guns.

Crain's New York reports that David Plouffe, a top Uber exec and former campaign manager for President Obama, met with famed civil rights activist Reverend Al Sharpton on Monday to convince him to oppose the cap. Plouffe, also an influential political figure, is said to have also been dispatched to meet with de Blasio and New York Gov. Andrew Cuomo.

Reps for Uber did not reply to multiple requests for comment. E-mails to MSNBC, where Sharpton hosts a show, and the National Action Network, a non-profit organization he founded, were not returned.

While this particular legislative dispute is specific to New York City, the broader strategy is ripped straight from the pages of Uber's playbook across the United States and in markets around the world. Whenever local politicians move in a direction Uber disagrees with, Uber pumps the gas by mobilizing grassroots support through its application and activating the many political operatives and lobbyists that the $40 billion startup has acquired to persuade lawmakers.

In Kansas, for example, Uber rallied through the app for locals to oppose a bill requiring background checks on drivers. When the state senate nonetheless approved the bill, Uber temporarily ceased operations to put additional pressure on lawmakers. Less than a month later, Gov. Sam Brownback signed a more favorable law. Uber promptly resumed operations. Left unspoken: Uber had recently hired Brownback's former campaign manager as a lobbyist.

"Uber's political influence efforts across the country, be it in Washington D.C. or in all 50 state houses, has been incredibly aggressive especially given how young a company it is," says Dave Levinthal, who tracks money in federal politics for the Center for Public Integrity. "Any place where they’ve got a political fight on their hands, they’re coming with not just a soldier, but a whole battalion."

David Plouffe, right, Uber senior vice president of policy and communications, talks about the Uber expansion in Phoenix as Arizona Gov. Doug Ducey listens during a news conference announcing the opening of the new Uber offices Thursday, June 11, 2015, in Phoenix.

Image: Ross D. Franklin/Associated Press

A young startup gears up for political battle early

The list of Uber's powerful friends is impressive considering the company was founded just five years ago.

The fast-growing service has brought on Obama's re-election campaign manager Jim Messina as an advisor, hired New York's deputy taxi commissioner and Gov. Cuomo's press secretary and recruited a political operative in Florida who worked with former Gov. Charlie Crist — just to name a few. In Portland, it employed the talents of Mark Wiener, an influential political consultant who was once referred to as "The Man in the Shadows."

Plouffe, widely credited with helping President Obama get elected, was originally hired to help Uber's CEO Travis Kalanick wage what he described as a political campaign against "an asshole called taxi" — and better position the company's branding as it runs up against regulators around the world.

All in all, Uber had more than 150 lobbyists nationwide as of the end of last year, according to The Washington Post.

The majority of that is focused in local governments, but it is also quickly boosting resources to lawmakers in the nation's capital. Uber spent $110,000 on lobbying in D.C. just in the first quarter of this year, more than half the total amount it spent in all of 2014, according to data provided to Mashable by the Center for Responsive Politics.

"Uber is a bit unusual in that it began its lobbying efforts pretty quickly after getting launched," says Viveca Novak, a spokesperson for the Center for Responsive Politics. "Often companies, particular in the tech industry, chug along for a while before realizing they need a stronger Washington presence, a la Google"

It's not just Uber. Arun Sundararajan, a professor of business at New York University, says several startups in the on-demand market, including Lyft and Airbnb, have ramped political efforts at an earlier stage precisely because these services largely operate offline and run up against local regulators earlier.

"They all developed political and government relation functions way, way earlier than the typical technology company," he says. Even by that standard, however, Sundararajan notes that the political maneuvering of these other companies are "not as brash and in your face as Uber."

It's a costly investment, assuming salaries for lobbyists and political operatives run comfortably into the six-figures for most, but then again Uber has raised more than $5 billion in private financing and appears to want nothing less than steamrolling its way to world domination.

Council member Ydanis Rodriguez, chair of the Committee on Transportation, speaks during a hearing on the growth of the For-Hire-Vehicle (FHV) industry with a focus on Uber, Tuesday, June 30, 2015, in New York. A new bill proposes a growth cap on vehicles for hire while New York City studies how e-hail companies are affecting traffic.

Image: Bebeto Matthews/Associated Press

But will it work in New York?

Uber has used a version of this playbook to push for its desired legislation in Kansas and to reach a detente with Portland, Oregon after launching without official approval. But it doesn't always work — and some doubt whether Uber will win its latest battle in New York City.

Evan Stavisky, a democratic political operative with The Parkside Group, praises Rev. Sharpton as a man with tremendous respect in the New York political establishment, but nonetheless believes it's foolish for Uber to think "one endorsement is going to deliver a philosophical change on the part of a progressive mayor and a progressive city council."

"It's about a conflict of ideas," Stavisky says. "The mayor has proven on a variety of issues, whether it was standing up to win Universal pre-k or quite frankly refusing to endorse Hillary Clinton, that there's no one personality that is going to sway him when he's got a position out of principle."

The mayor's office refrained from commenting directly on the latest rumor about Uber luring Sharpton, other than to re-assert its commitment to fighting city congestion.

"The legislation being considered by the Council is driven by the influx of 2,000 new vehicles coming onto our already congested streets every month—something that seriously concerns the administration and New Yorkers," Wiley Norvell, a spokesperson for de Blasio, said in a statement. "Riders will have plenty of options and drivers will have lots of employment opportunities. We are calling for a year of managed growth so we can study the impact this is having on congestion and air quality.”

Uber entered New York City's vast cab market in 2011 and has since delivered more than 30 million rides. In fact, Uber cars now outnumber the city's iconic yellow cabs, a once unthinkable feat. That is precisely the growth trend Uber wants to continue and city officials want to curb for the near future.

"I’ve always thought of New York as one of Uber’s big successes," says Sundararajan, the NYU business professor. Most likely, he says, the clash over capping new vehicles in the city will be a "road bump," which Uber will eventually move past, as it has done in other markets. But he admits the political strategy used by Uber and similar startups can be a little like throwing spaghetti at a wall.

"They’ve asked for permission. They’ve entered and asked for forgiveness. They’ve attempted grassroots activism. They’ve tried big name activists," Sundararajan says. "It's a learning-by-doing environment. It's not clear what exactly is going to work — and it's not clear what is going to work in one city will work in another."

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